Sobha Ltd SOBDEV)content.icicidirect.com/mailimages/IDirect_Sobha_Q4FY19.pdf · Q4FY19 financial performance and EBITDA margin comment: Sobha Dream Acres & Sobha Indraprastha contributed

ICIC

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ecurit

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Retail E

quit

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esearch

Result

Update

May 29, 2019

CMP: | 537 Target: | 620 ( 16%) Target Period: 12 months

Sobha Ltd (SOBDEV)

BUY

Sales momentum to continue to remain strong

Sobha’s topline grew strongly by 81.6% YoY to | 1,397.8 crore led by

102.9% YoY growth in revenues from real estate division to | 1,017.3 crore.

EBITDA margins contracted 30 bps YoY to 17.4% and were below our

estimate of 20.8%. PAT grew robustly by 73.2% YoY to | 113.3 crore (our

estimate: | 62.5 crore) led by strong topline growth.

Sales volumes grow 11.2% YoY in Q4FY19

Sobha achieved highest ever sales volumes of 1.13 million sq ft (msf) (11.2%

YoY growth) with a sales value of | 920.5 crore at an average realisation of

| 8,152/sq ft in Q4FY19. Bengaluru market contributed 74.3% to the overall

sales volume during the quarter with 11.8% YoY growth in sales volume.

While sales at Gurgaon (Sobha’s another key focus market), de-grew 12.0%

YoY, it grew 34.4% QoQ to 0.67 lakh sq ft in Q4FY19. Total sales collections

in Q4FY19 were at | 922.9 crore. Overall, the company clocked 4.03 msf

sales volumes (10.9% YoY growth) with total sales value worth | 3,122.5

crore and achieved collections worth | 3,236 crore in FY19.

Plans launches of 4.19 msf in FY20E

Sobha launched three projects (3.35 msf total saleable area) in GIFT City,

Bengaluru and Chennai in Q4FY19. The company has 9.07 msf area that is

yet to be released for sale in ongoing projects. Additionally, it further plans

to launch eight projects across 4.19 msf area in Bengaluru, Chennai, Pune,

Coimbatore & Thrissur in FY20E. While Sobha would need incremental debt

to fund its upcoming launches, it aims to maintain net D/E at ~1.1x, going

ahead. Overall, with healthy project launches in FY19 & FY20E, we expect

sales volumes of 4.2 each msf in FY20E/FY21E, respectively.

Contractual business revenues grow 39.7% YoY in Q4FY19

Sobha’s contractual revenues grew 39.7% YoY growth to | 420.1 crore in

Q4FY19. The company’s contractual orderbook of | 2,588 crore gives strong

revenue visibility for the next few years. Currently, Sobha is executing

orders for 8.6 msf area across 10 cities in India. Overall, we build in

contractual revenue growth at 21.7% CAGR to | 1163.8 crore in FY18-20E.

Valuation & Outlook

Sobha reported highest ever sales volume of 1.1 msf in Q4FY19. Bengaluru,

Sobha’s key market continues to witness strong traction with one of lowest

inventory overhang of 15 months. Coupled with its healthy launch pipeline

and more focus on affordable housing, we expect Sobha’s sales momentum

to sustain. Hence, we maintain BUY recommendation on Sobha with a

revised target price of | 620/share. Sobha’s net D/E at 1.0x is relatively higher

than its peers and remains the key monitorable for re-rating of the stock.

Key Financial Summary

| crore FY17 FY18 FY19E FY20E FY21E CAGE FY19-21E

Net Sales 2229.0 2783.0 3442.1 3794.8 4469.3 13.9%

EBITDA 419.8 519.7 673.3 750.1 904.0 15.9%

EBITDA Margin (%) 18.8 18.7 19.6 19.8 20.2

PAT 160.8 216.8 297.1 334.6 407.5 17.1%

EPS(|) 16.7 22.9 31.3 35.3 43.0

P/E (x) 32.2 23.5 17.1 15.2 12.5

EV/EBITDA (x) 17.5 14.3 11.2 10.3 8.5

RoNW (%) 6.1 7.8 13.3 13.7 15.1

RoCE (%) 7.7 9.7 14.7 15.6 17.9

Source: Company, ICICI Direct Research

Particulars

Particular Amount (| crore)

Market Capitalization 5,266.0

Total Debt 2,442.7

Cash and Investments 177.2

EV 7,531.5

52 week H/L (|) 553 / 381

Equity capital 94.8

Face value (|) 10.0

Key Highlights

Sobha achieved highest ever sales

volumes of 1.13 msf in Q4FY19

Plans to launch project on 4.19 msf

area in FY20E

Sobha’s contractual revenues grew

39.7% YoY growth to | 420.1 crore in

Q4FY19

Maintain BUY with target price of

| 620/share

Research Analyst

Deepak Purswani, CFA

[email protected]

Harsh Pathak

[email protected]

ICICI Securities | Retail Research 2

ICICI Direct Research

Result Update | Sobha Ltd

Exhibit 1: Variance Analysis

| crore Q4FY19 Q4FY19E Q4FY18 YoY (Chg

%)

Q3FY19 QoQ (Chg

%)

Comments

Income from Operation 1,397.8 681.4 769.6 81.6 787.9 77.4Topline growth on account of strong growth in

real estate division

Other Income 23.8 12.4 19.6 21.4 19.8 20.2

Material & construction cost 660.1 497.0 414.1 59.4 673.5 -2.0

Employee cost 65.6 61.3 52.6 24.7 58.8 11.6

Other expenditure 136.5 113.8 110.1 24.0 108.8 25.5

EBITDA 243.5 146.7 136.4 78.5 159.0 53.1

EBITDA Margin (%) 17.4 21.5 17.7 -30 bps 20.2 -276 bps

Depreciation 15.9 14.9 13.5 17.8 16.1 -1.2

Interest 75.8 54.1 51.8 46.3 53.1 42.7

PBT 175.6 90.1 90.7 93.6 109.6 60.2

Taxes 62.3 27.0 25.3 146.2 39.8 56.5

PAT 113.3 63.1 65.4 73.2 69.8 62.3 PAT growth was led by strong topline growth

Key Metrics

Sales Volume (msf) 1.1 1.0 11.2 0.9 24.3

Realisation (|) 8,151.3 6,456.6 26.2 6,604.1 23.4


Exhibit 2: Change in estimates

FY19 FY20E FY21E Comments

(| Crore) Old New % Change Introduced

Revenue 2,229.0 2,783.0 3,442.1 3,440.5 3,794.8 10.3 4,469.3 We introduce FY21E estimates

EBITDA 419.8 519.7 673.3 742.7 750.1 1.0 904.0

EBITDA Margin (%) 18.8 18.7 19.6 21.6 19.8 -183 bps 20.2

PAT 160.8 216.8 297.1 336.4 334.6 -0.5 407.5

EPS (|) 16.7 22.9 31.3 35.5 35.3 -0.5 43.0

FY17 FY18


Exhibit 3: Assumptions

Earlier Current Earlier Introduced Comments

Volume sold in msf FY18 FY19 FY19E FY20E FY20E FY21E

Total 4.2 3.9 4.0 4.2 4.1 4.2 We introduce FY21E estimates





Conference call Highlights

Sector overview: Though there are many tailwinds, the real estate sector

is currently unable to tap its full potential due to the NBFC crisis.

Nonetheless, consolidation is happening in the sector with developers

having healthy execution record and comfortable financial position

poised to reap the biggest benefits, going ahead. Also, with limited

housing supply getting added by stressed developers and with demand

seen intact, the management expects housing prices to increase, going

ahead

Management guidance: It expects the company’s performance in FY20E

to be better than its FY19 performance in terms of sales volume and

value. Bengaluru is expected to remain the top contributor to this

performance, followed by NCR market. However, sales in non-Bengaluru

will be higher on account of lower base. Overall, while demand is yet to

fully recover, the management expects all its present markets to show

good growth in FY20E. Also, it sees major demand coming from ticket

size up to | 2 crore, going ahead. On the pricing front, the management

does not see any meaningful improvement in the company’s blended

realisation as higher contribution to sales volumes in FY20E are

expected from the affordable housing segment

New launches: Sobha launched three projects in Q4FY19 – Sobha

Dream Heritage (0.52 msf saleable area) affordable housing project at

GIFT City; Sobha Royal Pavilion (2.23 msf saleable area) super luxury

residential project in Bangalore; and Sobha Palacia (0.60 msf saleable

area) super luxury project In Chennai. The company further plans to

launch projects across 4.19 msf projects in FY20E mainly on legacy land

bank. Furthermore, it could launch even more projects in FY20E, subject

to necessary approvals from authorities in place

Q4FY19 financial performance and EBITDA margin comment: Sobha

Dream Acres & Sobha Indraprastha contributed significantly to total

revenues in Q4FY19. On the EBITDA margin front, it was lower at 17.4%

in Q4FY19 as there was a reverse discounting on adjustment of interest

cost under Ind-As 115. According to this, the company took reverse

discounting of advance worth | 100 crore already received from

customers, which had 1.4% negative impact on EBITDA margin in

Q4FY19

GST treatment: Two of the affordable housing projects – GIFT City and

Sobha Dream Gardens, will be treated under 1% GST (without input tax

credit benefits). All other projects launched before April 1, 2019 will

follow the earlier GST structure i.e. 12% GST for all housing (8% for

affordable housing) with input tax benefits

Debt update: On account of strong launches planned ahead, the

management expects debt to go up from current level. However, it aims

to maintain the net D/E at ~1.1x, going ahead

Collections: The lag in collections growth rate compared to the pre-sales

growth rate is due to higher proportion of sales volumes coming from

new launches that took place in the past one and a half to two years and

major portion of the collection coming towards the completion of the

project. However, the management expects this lag to narrow down in

the coming year or two

Mattress business: Sobha has taken up 3,000 sq ft of retail space in

corporate office itself to foray in this business. It is further taking up

25,000 sq ft commercial space housing 3,000 SKUs to scale up in the

B2C category. The management sees this segment contributing

meaningfully to the overall company’s growth in next five to six years




Company Analysis

Exhibit 4: Quarterly sales trend

Particulars Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 YoY QoQ

Bengaluru

Sales Volume (Sq ft) 750,375 612,944 702,072 613,816 838,957 11.8% 36.7%

Average Realisation (|/sq ft) 6,958 6,819 6,887 7,002 7,964 14.5% 13.7%

Sale Value (| crore) 522.1 418.0 483.5 429.8 668.1 28.0% 55.5%

Thrissur

Sales Volume (Sq ft) 6,425 27,400 17,247 16,304 5,429 -15.5% -66.7%

Average Realisation (|/sq ft) 9,049 8,868 8,956 7,680 8,583 -5.1% 11.8%

Sale Value (| crore) 5.8 24.3 15.4 12.5 4.7 -19.9% -62.8%

Coimbatore

Sales Volume (Sq ft) 25,127 31,004 46,807 17,228 17,766 -29.3% 3.1%


Sale Value (| crore) 9.8 11.9 18.2 7.4 9.1 -7.4% 23.8%

Pune

Sales Volume (Sq ft) 5,727 1,104 4,825 5,936 - -100.0% -100.0%

Average Realisation (|/sq ft) 9,957 9,757 9,855 6,418 - -100.0% -100.0%

Sale Value (| crore) 5.7 1.1 4.8 3.8 0.0 -100.0% -100.0%

Mysore

Sales Volume (Sq ft) 10,944 49,371 61,881 50,836 18,574 69.7% -63.5%


Sale Value (| crore) 2.0 9.0 11.4 9.4 4.2 107.8% -54.9%

NCR

Sales Volume (Sq ft) 75,733 102,190 132,875 49,561 66,616 -12.0% 34.4%


Sale Value (| crore) 51.7 68.4 89.8 38.0 72.8 40.8% 91.5%

Chennai



Sale Value (| crore) 9.9 23.2 21.3 28.5 41.6 321.5% 46.1%

Calicut



Sale Value (| crore) 2.8 7.0 5.4 1.0 11.1 291.4% 968.6%

Cochin

Sales Volume (Sq ft) 116,409 75,627 12,726 118,377 111,425 -4.3% -5.9%


Sale Value (| crore) 62.2 39.6 6.7 69.7 105.9 70.2% 51.8%

Gift City

Sales Volume (Sq ft) 0.0 0.0 0.0 0.0 5036.0 - -

Average Realisation (|/sq ft) 0.0 0.0 0.0 0.0 5819.0 - -

Sale Value (| crore) 0.0 0.0 0.0 0.0 2.9 - -

Total

Sales Volume (Sq ft) 1,015,711 960,085 1,031,602 908,824 1,129,269 11.2% 24.3%

Average Realisation (|/sq ft) 6,635 6,502 6,567 6,455 6,584 -0.8% 2.0%

Sale Value (| crore) 655.8 611.8 616.6 600.2 920.5 40.4% 53.4%





Exhibit 5: Quarterly net D/E trend

2199.2

2263

2365

2399

2433.7

0.79 0.800.83 0.83

1.09

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1000.0

1500.0

2000.0

2500.0

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

(x)

(| crore)


Exhibit 6: Yearly net D/E trend

2,075.1

2,189.3

2,265.5

2,432.0

2,411.2

0.78

0.79

1.02 1.00

0.89

0.50

0.60

0.70

0.80

0.90

1.00

1.10

500.0

1,000.0

1,500.0

2,000.0

2,500.0

FY17 FY18 FY19E FY20E FY21E

(x)

(| crore)

Net debt Net debt to equity


Exhibit 7: Yearly sales volumes trend

3.0

3.63.9

4.2

2.4

1.5

2.0

2.5

3.0

3.5

4.0

4.5


(m

n s

q feet)





Exhibit 8: Revenue trend

2,243.7

2,787.1

3,323.3

3,667.7 3,577.6

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0


(| crore)


Exhibit 9: Real estate revenue trend

1,485.9

2,000.7

2,265.3

2,503.9

2,297.4

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0


(| crore)


Exhibit 10: Construction estate revenue trend

757.8 786.4

1,058.0

1,163.8

1,280.2

300.0

450.0

600.0

750.0

900.0

1,050.0

1,200.0

1,350.0


(| crore)


Exhibit 11: EBITDA and EBITDA margin trend

419.8 519.7 673.3 750.1 904.0

18.8 18.7

19.6 19.8 20.2

15.0

20.0

25.0

200.0

400.0

600.0

800.0


(%

)

(| crore)

EBITDA EBITDA Margin





Exhibit 12: PAT trend

160.8

216.8

297.1

334.6

407.5

3.0

6.0

9.0

12.0

15.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0


(%

)

(| crore)

PAT PAT Margin


Exhibit 13: Return ratios to improve, going ahead

6.1

7.8

13.3

13.7

15.1

7.7

9.7

14.7 15.6

17.9

-

5.0

10.0

15.0

20.0


(%

)

RoE RoCE





Valuation & Outlook

Sobha reported highest ever sales volume of 1.1 msf in Q4FY19. Bengaluru,

Sobha’s key market continues to witness strong traction with one of lowest

inventory overhang of 15 months. Coupled with its healthy launch pipeline

and more focus on affordable housing, we expect Sobha’s sales momentum

to sustain. Hence, we maintain BUY recommendation on Sobha with a

revised target price of | 620/share. Sobha’s net D/E at 1.0x is relatively higher

than its peers and remains the key monitorable for re-rating of the stock.

Exhibit 14: Valuation

Mn sq ft | crore | /share | crore | /share

Completed projects (A) 0.3 448.2 47.3 1.0 448.2 45.7

Ongoing & Proposed projects (B) 24.1 2812.9 296.7 1.0 2812.9 287.0

Other Land Bank (C) 199.6 4605 485.8 1.0 4605.3 485.8

Real Estate Business value (A+B+C) 224.0 7866.4 829.8 1.0 7866.4 818.6

Less:

Net debt 2432 256.5 2432.0 256.5

Land cost outstanding 143 15.1 142.9 15.1

Real Estate equity value 5291 558.2 1.00 5291.5 546.9

Construction Business 5x FY20E EV/EBITDA 679.6 71.7

Total SoTP Valuation 5971.1 618.6

Rounded off Target price 620.0

NAV Fair valueNAV

multiple (x)


Exhibit 15: Valuation metrics

Sales Growth EPS Growth PE EV/EBITD RoNW RoCE

(| cr) (%) (|) (%) (x) (x) (%) (%)

FY17 2,229.0 14.7 16.7 18.5 28.8 16.2 6.1 7.7

FY18 2,783.0 24.9 22.5 34.9 21.4 13.3 7.8 9.7

FY19E 3,442.1 23.7 30.8 37.0 15.6 10.4 13.3 14.7

FY20E 3,794.8 10.2 34.7 12.6 13.8 9.5 13.7 15.6

FY21E 4,469.3 17.8 42.3 21.8 11.4 7.9 15.1 17.9





Exhibit 16: Recommendation History vs. Consensus

0.0

20.0

40.0

60.0

80.0

100.0

0

150

300

450

600

750

May-19Feb-19Nov-18Aug-18May-18Feb-18Dec-17Sep-17Jun-17Mar-17Dec-16Sep-16Jun-16Mar-16

(%

)(|)

Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICI Direct Research

Exhibit 17: Top 10 Shareholders

Rank NameLatest Filing

Date

O/SPosition

(m)

Change

(m)

1 Menon (Sobha) 3-Apr-19 34.5% 32.7 -2.9

2 Menon (P N C) 31-Mar-19 18.3% 17.4 0.0

3 Franklin Templeton Asset Management (India) Pvt. Ltd. 31-Mar-19 7.5% 7.1 0.5

4 Schroder Investment Management (Hong Kong) Ltd. 31-Mar-19 6.8% 6.5 0.6

5 L&T Investment Management Limited 31-Mar-19 3.7% 3.5 1.0

6 Menon (Ravi) 3-Apr-19 3.1% 3.0 2.9

7 Nordea Funds Oy 31-Mar-19 2.1% 2.0 -1.6

8 Dimensional Fund Advisors, L.P. 31-Mar-19 1.9% 1.8 -0.1

9 SBI Funds Management Pvt. Ltd. 31-Mar-19 1.6% 1.5 0.2

10 The Vanguard Group, Inc. 30-Apr-19 1.5% 1.5 0.0

Source: Reuters, ICICI Direct Research

Exhibit 18: Recent Activity

Investor name Value (m) Shares (m) Investor name Value (m) Shares (m)

Menon (Ravi) 20.0 2.9 Menon (Sobha) -20.0 -2.9

L&T Investment Management Limited 7.6 1.0 Nordea Funds Oy -12.2 -1.6

Schroder Investment Management (Hong Kong) Ltd. 4.7 0.6 Norges Bank Investment Management (NBIM) -9.3 -1.4

Franklin Templeton Asset Management (India) Pvt. Ltd. 3.4 0.5 Pzena Investment Management, LLC -1.5 -0.2

Manulife Asset Management (Asia) 1.6 0.2 Alpine Woods Capital Investors, LLC -1.2 -0.2

Buys Sells

Source: Reuters, ICICI Direct Research

Exhibit 19: Shareholding Pattern

(in %) Jun-18 Sep-18 Dec-18 Mar-19

Promoter 55.9 55.9 56.0 56.0

Public 44.1 44.1 44.0 44.0

Others 0.0 0.0 0.0 0.0

Total 100.0 100.0 100.0 100.0





Financial summary

Exhibit 20: Profit and loss statement | crore

(| Crore) FY18 FY19 FY20E FY21E

Net Sales 2,783.0 3,442.1 3,794.8 4,469.3

Growth (%) 24.9 23.7 10.2 17.8

Other income 49.5 73.5 77.2 81.0

Total revenue 2,832.5 3,515.6 3,872.0 4,550.3

Raw Material Expense 1,680.0 2,056.1 2,260.7 2,703.0

Land cost 46.6 103.0 94.6 89.0

Employee benefit expenses 198.5 235.9 259.5 285.4

Other Expenses 384.8 476.8 524.5 576.9

EBITDA 519.7 673.3 750.1 904.0

Growth (%) 23.8 29.6 11.4 20.5

Interest 197.8 236.2 259.5 305.3

Depreciation 54.4 62.3 64.6 66.8

Other income 49.5 73.5 77.2 81.0

PBT 317.0 448.3 503.2 612.8

Taxes 100.2 151.2 168.6 205.3

Minoriy Interest - - - -

PAT after MI 216.8 297.1 334.6 407.5

PAT Growth rate 34.9 37.0 12.6 21.8

Adjusted EPS (Diluted) 22.5 30.8 34.7 42.3


Exhibit 21: Cash flow statement | crore

(| Crore) FY18 FY19E FY20E FY21E

Profit after Tax 216.8 297.1 334.6 407.5

Depreciation 54.4 62.3 64.6 66.8

Interest 197.8 236.2 259.5 305.3

Others (246.1) (224.7) (245.7) (286.3)

Cash Flow before wc changes 323.1 522.1 581.6 698.7

Net Increase in Current Assets (212.2) (1,589.7) (711.6) (359.1)

Net Increase in Current Liabilities 242.6 2,373.8 454.3 240.8

Net CF from operating activities 353.4 1,306.2 324.2 580.4

(Purchase)/Sale of Fixed Assets (59.7) (129.4) (185.0) (185.0)

Net CF from Investing activities (128.7) (56.2) (107.8) (104.0)

Inc / (Dec) in Equity Capital (62.0) (0.0) - -

Dividend (29.0) (109.5) (123.4) (150.3)

Interest paid (260.6) (236.2) (259.5) (305.3)

Inc / (Dec) in Loans 108.8 134.0 - -

Net CF from Financing activities (242.8) (211.8) (382.9) (455.6)

Net Cash flow (18.1) 1,038.2 (166.5) 20.8

Opening Cash 124.1 119.0 177.2 10.7

Closing Cash/ Cash Equivalent 119.0 177.2 10.7 31.5


Exhibit 22: Balance sheet | crore

(| Crore) FY18 FY19E FY20E FY21E

Liabilities

Equity Capital 94.8 94.8 94.8 94.8

Reserve and Surplus 2,675.1 2,134.3 2,345.5 2,602.8

Total Shareholders funds 2,769.9 2,229.1 2,440.3 2,697.6

Minority Interest - - - -

Total Debt 2,308.7 2,442.7 2,442.7 2,442.7

Deferred Tax Liability 252.1 - - -

Total Liabilities 5,331 4,672 4,883 5,140

Assets

Gross Block 613.8 687.7 712.7 737.7

Less Acc. Dep 138.0 200.3 264.9 331.7

Net Block 475.8 487.4 447.8 406.0

Goodwill on Consolidation - - - -

Capital WIP 134.5 190.0 350.0 510.0

Investments 112.5 112.8 112.8 112.8

Inventory 4,834.9 6,517.3 6,422.7 6,333.7

Sundry Debtors 327.2 335.5 467.9 551.0

Loans & Advances 3,020.5 2,919.5 3,593.4 3,958.4

Cash & Bank Balances 119.4 177.2 10.7 31.5

Total Current Assets 8,414.5 10,062.3 10,607.4 10,987.3

Creditors 3,663.5 6,040.8 6,498.0 6,734.5

Provisions 30.6 27.1 24.2 28.5

Net Current Assets 4,607.9 3,881.6 3,972.4 4,111.5

Total Assets 5,331 4,672 4,883 5,140


Exhibit 23: Key ratios

FY18 FY19E FY20E FY21E

Per Share Data (|)

EPS - Diluted 22.5 30.8 34.7 42.3

Cash EPS 28.6 37.9 42.1 50.0

Book Value 287.6 231.5 253.4 280.1

Dividend per share 8.4 11.6 13.0 15.9

Operating Ratios (%)

EBITDA / Net Sales 18.7 19.6 19.8 20.2

PAT / Net Sales 7.8 8.6 8.8 9.1

Inventory Days 634.1 691.1 617.8 517.3

Debtor Days 42.9 35.6 45.0 45.0

Return Ratios (%)

RoNW 7.8 13.3 13.7 15.1

RoCE 9.7 14.7 15.6 17.9

RoIC 9.2 14.2 15.2 18.2

Valuation Ratios (x)

EV / EBITDA 14.3 11.2 10.3 8.5

P/E (Diluted) 23.9 17.4 15.5 12.7

EV / Net Sales 2.7 2.2 2.0 1.7

Market Cap / Sales 1.9 1.5 1.4 1.2

Price to Book Value 1.8 2.3 2.1 1.9

Dividend yield 1.6 2.2 2.4 3.0

Solvency Ratios (x)

Net Debt / Equity 0.8 1.0 1.0 0.9

Debt / EBITDA 4.4 3.6 3.3 2.7

Current Ratio 2.2 1.6 1.6 1.6

Quick Ratio 0.9 0.5 0.6 0.7





Exhibit 24: ICICI Direct coverage universe (Real estate)

CMP M Cap

(|) TP(|) Rating (| Cr) FY19 FY20E FY21E FY19 FY20E FY21E FY19E FY20E FY21EFY19E FY20E FY21EFY19E FY20E FY21E

Oberoi Realty (OBEREA) 523 625 Buy 19,198 12.6 20.4 26.4 47.6 29.5 22.7 30.0 17.3 14.6 3.6 2.8 2.2 7.5 9.2 8.7

Mahindra Lifespace (MAHLIF) 381 410 Hold 1,956 19.7 23.3 27.5 19.4 16.3 13.9 32.1 63.1 56.8 0.9 0.9 0.9 4.9 5.6 6.3

Sobha (SOBDEV) 537 620 Buy 5,266 31.3 35.3 43.0 17.1 15.2 12.5 11.2 10.3 8.5 2.3 2.1 1.9 13.3 13.7 15.1

Sunteck Realty (SUNRE) 470 520 Hold 6,594 16.2 21.3 26.4 29.1 22.1 17.8 18.2 14.1 11.4 2.3 2.1 1.9 8.0 9.7 10.9

The Phoenix Mills (PHOMIL) 615 765 Buy 9,418 27.5 23.1 25.6 22.4 26.7 24.0 13.5 12.6 12.0 2.5 2.2 2.0 9.8 8.4 8.5

Brigade Enterprises (BRIENT) 234 330 Buy 3,198 10.2 17.6 18.0 23.0 13.3 13.1 11.2 8.2 8.6 1.4 1.4 1.3 6.1 10.3 9.9

P/B (x) RoE (%)

Sector / Company

EPS (|) P/E (x) EV/EBITDA (x)





RATING RATIONALE

ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its

stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,

Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined

as the analysts' valuation for a stock

Buy: >15%

Hold: -5% to 15%;

Reduce: -15% to -5%;

Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk,

ICICI Securities Limited,

1st Floor, Akruti Trade Centre,

Road No 7, MIDC,

Andheri (East)

Mumbai – 400 093

[email protected]




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Documents

Sobha Ltd SOBDEV)content.icicidirect.com/mailimages/IDirect_Sobha_Q4FY19.pdf · Q4FY19 financial performance and EBITDA margin comment: Sobha Dream Acres & Sobha Indraprastha contributed